GrenTech (GRRF) Sees Goodwill Impairment Charge For '08; Raises Q2 Revenue Guidance

June 30, 2009 9:33 AM EDT

GrenTech Corporation Limited (Nasdaq: GRRF) filed its annual report on Form 20-F for the year ended December 31, 2008.

GrenTech said it reassessed the valuation of its goodwill associated with the acquisition of Shenzhen Kaige Communication Technology Co., Ltd. in 2007 and recognize an impairment of goodwill of RMB27.6 million (US$4.0 million). The effect of the impairment charge on China GrenTech's fiscal year 2008 consolidated statement of operations is to increase operating loss from RMB102.5 million (US$15.0 million) to RMB130.1 million (US$19.1 million), increase net loss from RMB118.8 million (US$17.4 million) to RMB146.4 million (US$21.5 million) and increase diluted loss per ADS from RMB4.87 (US$0.71) to RMB6.00 (US$0.88).

GrenTech also upwardly revised its Q2 revenue guidance. As sales orders continue to exceed the Company's internal estimation due to increasing investment in network expansion by the telecommunication operators, management has revised its revenue guidance for the second quarter of 2009 from the range of RMB340 million to RMB380 million, representing a year-over-year increase of 83% to 104%, to the range of RMB400 million to RMB420 million, representing a year-over-year increase of 114% to 125%, to better reflect the current business prospects and performance.

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